UK house prices 'increased by almost 10 per cent in 2015'

Average UK house prices hit a new high of £208,286 by the end of 2015, according to the latest report from the Halifax. The new record represents an increase of 9.5 per cent during 2015.

David Sapsted

7 January 2016

The shortage of properties was the main reason for the rise, the Halifax stated on the day that an analysis by the Local Government Association (LGA) said there was a "bumper backlog" of nearly half a million homes across England still waiting to be built after being given planning permission.Martin Ellis, a housing economist at Halifax, said the latest figures indicated that, over the last quarter of the year, there appeared to be a slight softening in the rate of house price growth.But he added, "There remains, however, a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale."This situation is unlikely to change significantly in the short term, resulting in continuing upward pressure on prices."Halifax pointed to recent data from the Royal Institution of Chartered Surveyors (RICS) showing that the number of homes on the market was at a record low and, although the government has launched a number of initiatives to recently to encourage the construction of new homes, the LGA analysis indicated that residential construction projects which already had formal approval from local authorities simply were not being built.Peter Box, the LGA's housing spokesman, said, "Councils are approving almost half a million more houses than are being built, and this gap is increasing."While private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own. To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly."The study commissioned by the association and conducted by construction industry analysts Glenigan found that 475,647 homes with planning permission were still awaiting construction by the end of the 2014-15 financial year.Jeremy Blackburn, head of policy at RICS, said the analysis emphasised the conclusions of a recent study by the institution that concluded Britain construction industry was facing a dire skills shortage.RICS' most recent UK Construction Survey showed that the country's skills shortage had reached its highest levels since the survey was launched 18 years ago, with bricklayers and quantity surveyors in shortest supply. More than half of respondents reported difficulty sourcing labour, with 71 per cent saying they had particular difficulty sourcing bricklayers and 64 per cent highlighting a shortage of quantity surveyors.Mark Hayward, managing director of the National Association of Estate Agents, said the mismatch between demand and supply now meant that there were about 10 house-hunters for every home on the UK market."It's all very well planning to build houses, but we need to move to action and get the bricks and mortar on the ground, if we're to solve the crisis we're faced with," he said.But a spokesman for Department for Communities and Local Government said, "Building is already under way on more than half the 475,000 homes granted planning permission. And we've got Britain building again with a 25 per cent increase in the number of new homes delivered over the past year alone."For more Re:locate news and features on residential property, click hereand for more on commercial property, click here